UNITED STATES - The Oregon Public Employees Retirement Fund has been able to pick up new purchases which suggests cap rates on grocery anchored shopping centers are staying low and have yet to be hit impacted by the changes in the debt market.

In a deal partnered with Regency Centers, Oregon PERF acquired seven properties in a variety of markets around the United States, including a property at Cochran Commons in Charlotte, with a cap rate on this property was 6.6%.

Cap rate on the other assets was 7%, and all of these returns are based on current net operating income.

According to Brad Child, senior investment officer for real estate at the pension fund, the reason for the continued low cap rates is there is still a great deal of ‘all-cash' or low leveraged capital in the marketplace looking for core grocery anchored retail.

Moreover, Oregon PERF feels this deal shows a return to the marketplace for its relationship with Regency Centers.

"Last year, our relationship with Regency was not very active with all the capital that was in the marketplace for the first half of the year. But I would expect that this year will be a different story."

Acquisition price on the portfolio - located in North and South Carolina, California, Texas, Georgia and Florida - was $76.6m (€51.6m) while financing on the deal was in the range of 50% loan-to-value.

Oregon PERF supplied 80% of the equity for the deal while Regency contributed 20% but both parties still have more capital to invest through their partnership and are looking for core grocery anchored retail properties elsewhere in the US.

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